The tolerable deviation rate for a test of controls is generally:
A)lower than the expected rate of deviations in the related accounting records.
B)higher than the expected rate of deviations in the related accounting records.
C)identical to the expected rate of deviations in the related accounting records.
D)unrelated to the expected rate of deviations in the related accounting records.

Question

Quizplus · Accepted Answer

The tolerable deviation rate is the maximum rate of deviation from a prescribed control procedure that the auditor is willing to accept without modifying their planned assessed level of control risk. Since the auditor's tolerance for risk is higher than the expected rate of deviations in the related accounting records, the answer is (B) higher.

The Tolerable Deviation Rate for a Test of Controls Is